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Nuclear Subsidies – We Told You So – Moorside and Sizewell UK

NuClear News No.107 May 2018,  Moorside Seeking a Government stake in Horizon has been a key lobbying strategy for Hitacji for well over a year now, but the UK government’s refusal to make even a commitment in principle on that front has many in the UK nuclear industry worried. None more so than those invested in the success of another nuclear developer: NuGen, the company Toshiba hopes to sell to exclusive bidder Korea Electric Power Co. (Kepco). Kepco appears to be losing enthusiasm for the project in the absence of support from the UK government — especially with prospects of a reactor deal in Saudi Arabia. (13)

The state-run Korea Electric Power Corp. (KEPCO) is now saying that it will finalise its purchase of NuGen by September after analyzing its potential profits and viability. Yet in December, when KEPCO was selected as a preferred bidder by Toshiba, the company said it would finalise the deal in early 2018.The Seoul government is involved in the negotiation and is delving into the nuclear project’s profitability and potential risks, while the two companies have been discussing the detailed terms of contracts. Unlike KEPCO’s UAE project, which only involves the construction of nuclear reactors, market watchers say the Moorside project is more risky because KEPCO has to come up with financial solutions for construction and operation. The state-utility firm plans to build two of its APR-1400 reactors on the site, which would have a combined capacity of up to 3 gigawatts. (14)

Back home KEPCO is struggling with snowballing losses because of the South Korean government’s plan to shift to renewable energy from nuclear and coal power. (15)

Sizewell

Meanwhile EDF Energy appears to be going through the same process as Hitachi – demanding huge government subsidies to continue with the project and threatening to pull out if it doesn’t get them; then denying that it was threatening and starting negotiations with a government obsessed with building new reactors. EDF Energy told the Times at the start of April that it would reconsider plans for Sizewell C if it is unable to agree a viable financing model with the UK government. EDF threatened to abandon work unless it receives assurances from the government this year that a viable funding model exists. Simone Rossi, EDF Energy’s UK chief executive, said that rapid progress was needed because promised cost savings would not materialise if there was a significant delay between work on Hinkley and work on Sizewell. Mr Rossi has promised that Sizewell should be a fifth cheaper to build than Hinkley Point because EDF will be able to replicate much of the design work and will have a fully qualified workforce and supply chain ready to transfer across. However, he warned that a delay could jeopardise this. A lull of six months could be surmountable, but two years or more would be a problem. (16)

Later EDF denied it had threated to abandon work on Sizewell C and distanced itself from a report that it may pull the plug on the project unless it receives financial assurances from the Government. (17) Emily Gosden, author of the Times story tweeted “apparently EDF has ‘distanced itself’ from my story this morning… which reported what its chief executive told me on the record.”

In May Le Monde reported that EDF had launched discussions with the British government to find a new way of financing new reactors in Sizewell. (18)

 The GMB called on the government to stop dithering and get Sizewell built. It’s an absolute no brainer that Britain will need at least six new nuclear plants, it said, because the National Grid has forecast up to 35 million pure electric vehicles will be on the roads by 2050 needing an extra 30 gigawatts of power — the equivalent of 10 Hinkley Point power stations. (19)

 Dr Simon Evans of Carbon Brief tweeted in response: Energy-related press releases from GMB union are a sight to behold. They constantly repeat the same talking points, many of which are misleading or just plain wrong. Also of note: with rare exceptions, the quotes never end up in the papers. GMB union keeps saying National Grid has forecast a need for 30GW of extra power for EVs. At best, this is hopelessly misleading. We explained why last year, but that hasn’t stopped GMB. (See https://www.carbonbrief.org/factcheck-how-much-power-will-uk-electricvehicles-need )

It is worth noting that Framatome (formally Areva NP, which is now owned by EDF, Mitsubishi Heavy Industries (MHI) and Assystem), is working on a ‘new model’ EPR, the EPR-NM, “offering the same characteristics” as the EPR but with simplified construction and significant cost reduction – about 30%. The basic design was 30% complete by March 2016, and EDF has said that it, not the complex EPR being built at Flamanville, would be the model that replaced the French fleet from the late 2020s. (20) EDF has already said it hopes to reduce the costs of Sizewell C by 20-30%. (21)

 Since Sizewell C isn’t expected to become operational until 2031, with construction starting around 2021, (22) it seems highly unlikely that EDF would try building anything other than an EPR-NM design. The question then is whether the EPR-NM would be required to undertake a new Generic Design Assessment.

In April Caroline Lucas asked the Secretary of State for Business, Energy and Industrial Strategy, whether the Design Acceptance Certificate for the European Pressurised Reactor (EPR) could be used for a re-designed EPR. Energy Minister, Richard Harrington, replied that a GDA is not a statutory requirement of the nuclear licensing regime and any site specific elements of EPR design will be assessed by the Office for Nuclear Regulation as part of a site specific safety case ahead of any construction. (23) The DAC for the European Pressurised Reactor (EPR) was issued on 13 December 2012 and is valid for a period of ten years. Renewal of the DAC is not mandated. Harrington also noted that ONR expect to complete its assessment of the EPR sitespecific safety case for Hinkley Point C in 2018. DAC renewal is not mandated and EDF has not informed Government that it plans to seek a renewal.

 It is hard to see how such big cost reductions can be achieved without some dramatic changes sufficient to require a new safety case

According to the FT the Labour party is divided over whether to back new nuclear power stations. The high cost of Hinkley has prompted questions across Westminster about whether nuclear still represents value for money. Some MPs favour the industrial benefits of building power stations, while a growing faction wants to support only renewable wind and solar energy programmes. “It’s like a wasp’s nest, the differences are really bad,” said one shadow minister. “The jury is out and personally I’m still not convinced that nuclear should be part of the mix.” Rebecca Long-Bailey, shadow business secretary, remains adamant that Labour should continue to support Wylfa, as well as Moorside. “Public investment in nuclear energy would bring huge benefits through the nuclear supply chain and energy security,” she said. Ms Long-Bailey’s position is also supported by Sue Hayman, shadow environment secretary, whose constituency is in Cumbria. Large unions, including Unite and the GMB, are also strong advocates of nuclear energy. But other senior Labour figures are arguing for a U-turn, unless the cost of new nuclear plants can be reduced sharply. One compromise under consideration could see Labour keep the commitment it made in last year’s manifesto by supporting smaller “modular” reactors. Senior people in the nuclear industry said they remained confident about Labour’s continued support for their projects, because of the strength of union backing. (24)

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May 19, 2018 - Posted by | politics, UK

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